The UK Transition Plan Taskforce (TPT) has launched a consultation on its proposed Disclosure Framework and accompanying Implementation Guidance, also launching a sandbox for companies and financial institutions to test implementation.

The taskforce emphasised that high quality transition plans are “crucial” for the transition to net zero and can help to create transparency and accountability for companies to meet their net-zero targets, as well as enable investors to make better informed decisions.

The TPT was initially announced by the former-Chancellor at COP26, tasked with developing a 'gold standard' for private sector climate transition plans.

In line with this, the Disclosure Framework outlines recommendations for companies and financial institutions to develop gold-standard transition plans, while the guidance sets out the steps to develop a transition plan, as well as when, where and how to disclose their plan.

In particular, the TPT recommended that entities consider the full range of levers at their disposal to contribute to and prepare for an economy-wide transition to net zero, arguing that this will help avoid potential unintended consequences, such as ‘paper decarbonisation’.

It also recommended that organisations publish standalone transition plans at least every three years, and sooner when there are significant changes to the plan, suggesting that progress against these plans should then be reported annually as part Task Force on Climate-Related Financial Disclosures (TCFD) disclosures.

The framework received input from representatives from a range of industry organisations, including Aviva, Church of England Pension Board, HM Treasury and Nest, while the framework also received support from organisations such as the Financial Conduct Authority (FCA), and The Pensions Regulator.

The framework will be used to inform future regulation in the UK, with the FCA to draw on the TPT’s final outputs to strengthen their transition plan disclosure expectations of listed companies, asset managers and regulated asset owners.

The taskforce has also announced plans to publish a range of sector guidance in 2023, starting with an overview of sector-specific metrics from existing guidance which can supplement the recommendations of the TPT Disclosure Framework.

TPT co-chair and economic secretary to the treasury, Andrew Griffith, highlighted the announcement as "a significant step in delivering on our commitment made at COP26 last year – to become the world’s first net zero-aligned financial centre.”

Adding to this, TPT co-chair and Aviva group CEO, Amanda Blanc, stated: “In recent years, we have seen a wave of private companies announcing their ambitions to contribute to net zero.

"We now need financial firms and companies to come forward with high quality plans to show how they will meet their targets. Transition plans are a key building block for delivering a net zero future. This is why the work of the TPT is so important."

Adding to this, Nest chief investment officer, Mark Fawcett, stated: “The Disclosure Framework and Implementation Guidance are key tools for companies to develop high-quality and comparable transition plans.

"It’s important this information is readily available – we want to manage the climate risk our members are exposed to and support our goal of being a net-zero investor. We therefore urge companies to start developing transition plans and participate in TPT’s sandbox.”

Share Story: